India is poised to achieve a significant milestone by 2023 as it becomes one of the first countries to eradicate the use of electric detonators to trigger the main explosive. Over 60 years old, GOCL Corporation Limited has been an active player in the Indian mining explosives market. Recently, the company has focused on diversifying its already heterogeneous product portfolio, including energetics and explosives, special projects, and realty. It has also entered the EMS and electronics market. In an email interaction, Pankaj Kumar, MD & CEO of GOCL Corp. Ltd, discussed the progressive trends of electronic detonators in India and the world.
Q. How do you see the fact that the Indian government is phasing out the electric detonators?
A. As per the government of India notification, electric detonators are to be phased out from April 2024. The decision is primarily driven by the need to address security concerns and prevent the potential misuse of such explosive devices by anti-social elements, terrorist organisations, and individuals with malicious intent. Electric detonators, due to their electrical initiation mechanism, have the potential to be triggered remotely, making them susceptible to unauthorised use.
Q. How has the overall demand and supply for electronic detonators been in the last 2-3 years? What are the key factors that have affected it?
A. Over the past 2 to 3 years, the demand for electronic detonators has witnessed significant growth, primarily due to the rapid development and expansion happening in various sectors in India. With the country experiencing a growth rate of 7-8%, there has been a substantial increase in mining activities, infrastructure development projects, and the construction of critical transportation links such as the North East Link and tunnel networks. This has simultaneously increased the demand for efficient and safe explosive solutions that aid in excavation, blasting, and controlled demolition processes.
Additionally, the focus on safety and compliance has intensified, leading to a shift towards using electronic detonators over conventional alternatives. Electronic detonators offer enhanced precision, accuracy, and control, resulting in improved safety measures during blasting operations. These innovative detonators also provide greater flexibility and precision in blasting operations, enabling more efficient resource utilisation and minimising environmental impact.
Q. What future do you see for the electronic detonators market in India? Any major trends?
A. Electronic detonators offer several advantages over traditional electric detonators, including ease of operation. According to a market research report by MarketsandMarkets, the Indian electronic detonator market is projected to grow at a CAGR of 6.4% between 2021 and 2026 due to the increasing demand for electronic detonators in mining and quarrying operations, as well as infrastructure development projects.
With the ban on electric detonators by the government of India starting in April 2024, there is expected to be a significant increase in the demand for electronic detonators.
Q. Is India a lucrative market for detonators, or do the main margins come from exports? Also, is India a ‘net consumer’ or a ‘net creator’?
A. India is indeed a lucrative market for detonators, but the margins for our company also come from exports. The growing nature of the Indian economy presents significant opportunities for detonator manufacturers, given the substantial infrastructure development, mining projects, and tunnelling activities taking place across the country.
India’s status as a net creator rather than just a consumer in the detonator industry contributes to the export-oriented approach. With the country’s strong manufacturing capabilities and emphasis on quality and safety standards, India has established itself as a reliable supplier of detonators in the global market.
Q. What differences do you see in the texture of domestic and international detonator markets? Do you tackle both with different strategies?
A. The domestic market will move towards an increase in the value of after-sales service in addition to product quality and cost. With the increase in coal production, mining activities, and infrastructure projects in the country, the demand for detonators and explosives is bound to increase exponentially.
The international market receives world-class quality products from multinationals and local players. The challenge for us is to supply them at a lower cost while maintaining the same quality.
Our strategy to tackle both markets is to produce quality products at the right cost and come up with new products from time to time to suit market needs ahead of others.
Q. What are the key elements that need to be worked upon for India to be a global leader in detonators?
A. To establish India as a global leader in detonators, there are three key elements that need to be focused on: quality, cost, and innovation. Ensuring high-quality standards is crucial to building trust among global customers. This involves implementing stringent quality control measures throughout the manufacturing process, from sourcing raw materials to final product assembly. Adhering to international safety standards, certifications, and best practices will enhance the reliability, performance, and safety of detonators.
Competitiveness in terms of cost is essential for increasing markets globally. By optimising production processes, adopting efficient technologies, and implementing cost-effective supply chain management, Indian manufacturers can offer detonators at competitive prices without compromising quality.
Further, innovation is highly essential for providing the most advanced and customised solutions that cater to specific industry requirements and address emerging market trends. Investing in research and development, collaborating with academic institutions, and fostering a culture of innovation within the explosives industry are vital. Developing new technologies, initiating advancements in initiation systems, and enhancing the precision, safety, and environmental sustainability of detonators will give India a competitive edge.
Q. Going forward, what challenges do you see for the detonators and electronics industry?
A. Looking ahead, both the detonators and electronics industries are expected to face certain challenges as the market is highly competitive with numerous players. The presence of multiple manufacturers and suppliers creates intense competition, driving companies to differentiate themselves through product innovation, quality, and cost competitiveness. Sustaining a competitive edge amidst this competition will require continuous improvements and adaptation to changing market dynamics.
With increasing competition and evolving market dynamics, consolidation within the detonators and electronics industries is likely to occur. Companies may explore mergers, acquisitions, or strategic partnerships to enhance their market position, expand their capabilities, and achieve economies of scale.